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Markel Approves $300M Share Buyback

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In its concerted effort to enhance shareholders’ value, the board of directors of Markel Corp. (MKL - Snapshot Report) approved a new buyback program authorizing the company to repurchase upto $300 million worth of shares.

The recent approval replaces the earlier program approved in Nov 2010. Under the earlier authorization, Markel bought back about $101 million worth of shares within a span of three years. In the first nine months of 2013, the company spent $56.9 million in share repurchases, registering more than threefold year-over-year increase.

The new authorization by Markel is duly supported by the company’s sturdy financial position. While cash and cash equivalents soared to $2.1 billion at third quarter-end (up 145% from 2012-end level), cash from operations in the first nine months came in at $542 million (up 126% year over year).

A sustained solid operational performance continues to cushion Markel’s sturdy financial position. The company delivered earnings surprises in 3 of the last 4 quarters with an average beat of 90.1%.

Several insurers are in the news for approving share repurchase authorizations, in an intention to boost the bottom line and enhance shareholders’ value. While ACE Ltd (ACE - Analyst Report) is authorized to repurchase $2 billion worth of shares through Dec 31, 2014, Montpelier Re Holdings Ltd. (MRH - Analyst Report) increased its share buyback authorization by $150 million. The board of directors of Assurant Inc. (AIZ - Analyst Report) also approved an increase of $600 million of share repurchase.

There was no earnings momentum over the last 7 days. With the approval of the new buyback authorization, we expect analysts to raise their estimates exerting upward pressure on the Zacks Rank. Markel presently carries a Zacks Rank #2 (Buy).

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